Government reforms to Empty Dwelling Management Orders raise urgent questions for mortgaged homeowners and lenders
The government announced on 27 September 2026 that it intends to reduce the empty dwelling vacancy threshold from two years to six months. Under the change, councils will be able to pursue an Empty Dwelling Management Order (EDMO) against a property that has stood empty for just half a year. For mortgage brokers and lenders, the change raises questions about their exposure and obligations before any council ever files an application.
The Ministry of Housing, Communities and Local Government also announced changes to the application process. Councils will no longer need to demonstrate anti-social behaviour or community support to pursue an order through the Residential Property Tribunal.
Under an EDMO, councils assume management responsibility for a long-term empty home and can return it to occupation for a period of up to seven years. Ownership stays with the property owner throughout, but the mortgage does not go away.
What does the EDMO reform mean for mortgaged properties?
Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol, said the implications for mortgaged homeowners and their lenders are worth examining carefully.
Mortgaged properties can fall within the scope of an EDMO, and where an order proceeds the loan remains entirely the borrower’s responsibility. Under an order, a council can let the property and apply rental income against its management costs. Loan repayments remain the borrower’s obligation.
“Ownership does not transfer to the council, so the mortgage remains entirely the borrower’s responsibility throughout,” Mendes said.
For lenders, the concern is different. Their security remains intact, but a third party may be managing and letting the property that secures the loan. An exemption applies where a lender has already taken possession. Short of repossession, however, lenders have limited standing to prevent an order.
The insurance problem arrives earlier
Mendes noted a more immediate issue that predates the six-month threshold by a considerable margin. Most standard buildings insurance policies restrict cover after 30 to 60 days of vacancy, unless specialist arrangements are in place.
Maintaining suitable cover is typically a condition of the mortgage itself. That means borrowers leaving a mortgaged property vacant face potential mortgage covenant breaches well before any council begins considering an EDMO.
Brokers advising clients on properties held between transactions, undergoing probate, or sitting empty pending renovation need to flag this sequence clearly.
Unoccupied property cover has already moved into the mainstream broker conversation. One specialist insurer, Ceta Insurance, reported that sales of unoccupied property policies in 2025 ran 500% ahead of 2020 levels.
England’s long-term vacant housing stock now stands at more than 303,000 properties. House Buyer Bureau, using government live tables and UK House Price Index data from June 2026, values that stock at £88.6 billion.
What should brokers do before the EDMO reform takes effect?
Mendes advises not to wait for the six-month mark. Anyone expecting a mortgaged home to stand empty for an extended period should review their mortgage conditions and insurance requirements immediately. They should notify their lender and insurer where required. Arranging specialist unoccupied-property cover before the standard policy restriction triggers is essential.
The EDMO threshold determines when a council can act — it does not set the point at which mortgage and insurance obligations begin to apply. Both can become relevant weeks into a vacancy. Understanding the full picture of unoccupied property insurance is increasingly important for intermediaries whose clients move between properties, inherit homes, or hold investment stock.
No implementation date has been set for the EDMO reform. No significant public lender response has emerged at the time of writing. Mendes suggested that mortgage terms around properties affected by EDMO proceedings are likely to attract closer scrutiny as implementation approaches. Intermediaries advising clients with vacant mortgaged properties should not wait for that scrutiny to arrive.
